A pool of private student loans, provided to borrowers through the Iowa Student Loan Liquidity Corp., will secure $160.9 million in revenue bonds through series 2025A and 2025B.
All the senior notes are fixed, according to S&P Global Markets, with the two, taxable series A notes maturing on Dec. 1, 2035 and Dec. 1, 2045. The seven tax exempt notes, which are all rated AA, have expected final maturity dates ranging from Dec. 1, 2030 through Dec. 1, 2045.
RBC Capital Markets is the lead underwriter, according to the rating agency.
The bonds benefit from credit support ranging from 20.3%-21.4%, based on stressed, break-even cash flow scenarios, says S&P, which it says provides coverage of about 5.1x-5.5x of its expected net loss of approximately 3.9%.
Initial senior and total bond parities amount to 127.9% and 119.0% respectively, the rating agency said. The reserve account equals 2.0%, or $11.2 million, of the transaction’s initial bond balance at closing, and must remain at the 2.0% of the current bond balance.
The reserve target will increase to 5.1%, if on Nov. 30, 2025 the cumulative amount of loans originated with amounts deposited to the acquisition account at closing is less than $13 million. That condition is only temporarily in place until Dec. 1, 2027, when it will return to 2.0%, S&P said.
The Iowa Student Loan pool has a total current balance of $492.5 million, and $15 million in total accrued interest. The 28,207 loans represent 18,268, with an average balance per loan of $17,463, according to S&P.
Most of the pool, 68.6%, is in the repayment phase, while 19.1% of the loans in the pool are in deferment. Slightly more than one third of the pool, 31.5%, is not in repayment, S&P said. After that, loans that have started repayment between 37 to 48 months account for 22.6% of the pool, the next largest group.
